US may limit Open Skies deal with UK after Brexit

“You can’t just scratch out ‘EU’ and put ‘UK’,” a man attending the secret negotiations said

Bilateral negotiations show that leaving the European Union might bring worse conditions for Britons travelling to the US.

IAG, who own British Airways, could be hit the hardest — Fasttailwind / Shutterstock

As the relationship is currently covered by the Open Skies deal that applies to the whole Union, the post-Brexit arrangements that are currently being discussed may be weakened.

According to the Financial Times, British and American negotiators secretly met in January for the first formal talks about new air service deal between the two countries. They aim to fill the gap that will be in place after Britain leaves the Open Skies deal with the EU.

The US has a template for standard bilateral treaties that are far less concrete than the one signed with the EU.

One person attending the London meetings told the FT: “You can’t just scratch out ‘EU’ and put ‘UK’.” A British official reportedly told the paper that it reveals “the squeeze” the UK will facing while trying to reconstruct international agreements following Brexit.

The terms offered by the US are far less generous than the Open Skies agreement, and would affect carriers such as British Airways, owned by IAG who could be hit the hardest, Norwegian UK and Virgin Atlantic.

The deal offered at the meeting would require British carriers operating flights to the US to have major ownership of parties from their country of origin. This would be a problem as British airlines have large foreign ownership.

This is hardest for IAG, who could struggle to meet the EU’s requirements of a 50 per cent ownership threshold by EU nationals in order to maintain access to European airspace. UK nationals will no longer be considered after Brexit.

However, negotiators expressed confidence that the transatlantic market would continue unimpeded.

If a deal is reached it could ease Britain’s exit from the EU in March next year, people familiar with the discussions, told Bloomberg.

“For the airline industry, discussions with the U.K. are making significant progress,” senior vice president for global government affairs at Airlines for America, Sean Kennedy, told Bloomberg.

“We are pleased with the leadership of both countries in reaching a new agreement as soon as possible.”

“We are highly confident in their desire to reach a deal.”

Kennedy said that the talks “have been positive and we have made significant progress”.

In a statement issued on Monday, the British Department for Transport said that the talks “have been positive and we have made significant progress,” adding that both sides want to conclude the discussions “soon”.

“All parties have a shared interest in ensuring that existing rights will continue under the new bilateral arrangements, allowing airlines on both sides of the Atlantic to continue to operate existing services as well as to seek to develop new ones,” the department said.